Primary versus Secondary Market

• Primary Market: Where new stocks are made and offered to Investors (e.g., through Initial public selling s (IPO) ).
• Secondary Market: Where previously issued stocks are traded among Investors.

Example: The Primary market resembles a book shop's new delivery segment, while the secondary market looks like a pre-owned book shop where recently buyd books are exchanged.

IPOs and FPOs

• Initial Public Offering (IPO):The main offer of stock to general public.
• Follow-on Public Offering (FPO):Extra shares issued after the Initial public selling.

Example: An Initial public selling resembles a fantastic opening of a café, while a FPO resembles adding more seating because of popularity.

Aspect	IPO (Initial Public Offering)	FPO (Follow-on Public Offering)
Definition	The main offer of stock to general public.	Extra shares issued after the Initial public selling.
Objective	To raise funds for new projects or expansions of business operations.	To raise additional funds or reduce the investors holdings.
Company Status	Issued by an private organisation going public.	Issued by an organisation whichis already listed on the stock exchange.
Risk Level	Comparatively higher, as the organisation’s performance still needs to be proven.	Comparatively lower, as the organisation has already a historical performance.
Investor Confidence	Depends on the organisation's growth, ability and market sentiment.	Usually higher due to the organisation’s already established reputation.
Pricing	Price is determined using book building or fixed price methods.	Price depends on the current market valuation.
Regulatory Requirements	Needs a robust disclosures and regulatory approvals.	Needs comparatively fewer disclosures than IPOs.